Radiation therapy firm Accuray announced today that it has signed an agreement to acquire Madison, WI-based TomoTherapy in a deal valued at approximately $277 million.
Under the terms of the transaction, TomoTherapy shareholders will receive $3.15 in cash and 0.1648 shares of Accuray common stock per share of TomoTherapy common stock. Based on the closing price of Accuray's common stock on March 4, 2011, the stock component of the consideration is valued at $1.65 per share. The acquisition price represents a premium of 30.8% above the closing price of TomoTherapy's shares on March 4, 2011.
The transaction has been approved by the boards of both firms and is expected to close in the second quarter or the beginning of the third quarter of calendar year 2011.
The objective of the merger is to combine best-in-class technologies from two high-growth radiation oncology firms, according to Accuray and TomoTherapy.
"The companies currently serve complementary patient populations that are treated by the same medical specialty," the two firms said in a joint statement. "The combined company will offer advanced, patient-focused technologies for the treatment of cancer and other diseases, ranging from high-precision radiosurgery for early stage and localized disease to image-guided, intensity-modulated radiation therapy for more advanced disease sites throughout the body."
The acquisition was made to enhance Accuray's growth strategy, according to Euan Thomson, PhD, president and CEO of Accuray. The merger of the two companies is expected to increase global market presence, improve operating efficiencies, reduce overhead costs, and allow more investment in research and development, he said.
The new company will have more than 1,100 employees and an installed base of more than 550 units in 32 countries. Combined revenue of the two firms in the 2010 calendar year exceeded $400 million, 30% of which was from service of the installed base, according to Accuray and TomoTherapy.
